Professional Documents
Culture Documents
(126926-H)
Like the Dandelion floral meaning of love, faithfulness and happiness, AEON adopts similar values in its commitment towards Peace, People and Community. The spread of pollen represents AEONs aim for continuous growth and expansion, enriching lifestyles of its customers across Malaysia.
contents
01
CORPORATE AND BUSINESS REVIEW
2 An Introduction AEON Group 3 Corporate Information and Directory 4 Five-Year Financial Highlights 5 Share Price and Financial Charts 6 AEON Seri Manjung Shopping Centre 7 Human Resource Development 8 Sustainable Corporate Social Responsibility 17 Chairmans Statement 20 Directors Prole 25 Senior Management 26 Review of Operations
47
FINANCIAL STATEMENTS
48 Directors Report 52 Statements of Financial Position 53 Statements of Prot or Loss and Other Comprehensive Income 54 Statements of Changes in Equity 56 Statements of Cash Flows 58 Notes to the Financial Statements
29
CORPORATE GOVERNANCE
29 Statement on Corporate Governance 38 Terms of Reference of the Audit and Risk Management Committee 41 Audit Committee Report 43 Statement on Risk Management and Internal Control 45 Additional Compliance Information 46 Statement of Directors Responsibility
103
OTHERS
103 Analysis of Shareholdings Substantial shareholdings Directors Interests 104 List of Thirty (30) Largest Shareholders 106 Particulars of Properties 108 AEON Stores, Shopping Centres and MaxValu 110 Milestones 112 Notice of Annual General Meeting 114 Notice of Dividend Payment Proxy Form
Peace
Customers
People
Community
OUR PRINCIPLE The fundamental principle of AEON is its Customer Centred Approach. AEONs mission is and always will be to contribute to the customers. AEONs most basic and abiding principles are the pursuit of peace, respect for humanity and contribution to local communities through customer-centred initiatives. Under these principles, we are determined to achieve global management standards while being the best serving retailer in the local community. OUR STRATEGY AEON follows two strategies for continuous growth: Organic Growth and Company Tie-ups. Its core business of shopping centre operations includes GMS and Supermarkets. AEON builds complementary operations such as specialty stores, shopping centre development, services and works to create synergies among this diverse business. OUR GOAL AEONs goal is to operate as an international-scale retailing group, recognised for excellence not only in Japan, but also in other nations. The international recognition we are working to achieve is not one which can be measured merely in quantiable term of size, growth and protability. We hope to be competitive at the global level in intangible aspects such as customer satisfaction and corporate citizenship. We are dedicated to the idea of quality management to further enhance our capabilities.
AUDITORS
KPMG Desa Megat & Co. (AF0759) Chartered Accountants Level 10, KPMG Tower, 8, First Avenue Bandar Utama, 47800 Petaling Jaya Selangor Darul Ehsan Tel : 03-7721 3388 Fax : 03-7721 3399
SHARE REGISTRAR
Tricor Investor Services Sdn Bhd (118401-V) Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 03-2264 3883 Fax : 03-2282 1886
DATE OF INCORPORATION
15 September 1984
WEBSITE
http://www.aeonretail.com.my
PRINCIPAL BANKERS
Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
(302316-U)
coRpoRAte cALenDAR
Notice of Annual General Meeting 30 April 2012 Annual General Meeting 24 May 2012 Payment of Dividend Book Closure 14 June 2012 Payment 11 July 2012 Quarterly Results Announcement 1st Quarter 24 May 2012 2nd Quarter 24 August 2012 3rd Quarter 29 November 2012 4th Quarter 28 February 2013
1,700,661 1,650,707 1,496,013 1,507,772 1,558,168 44,276 23,619 9,668 1,075 1,075 937,235 763,156 727,024 532,366 532,895 2,682,172 2,437,482 2,232,705 2,041,213 2,092,138 351,000 351,000 351,000 351,000 351,000 36,865 16,772 * 39,742 31,666 32,183 1,081,190 920,138 * 735,756 601,528 499,072 1,469,055 1,287,910 1,126,498 984,194 882,255
20,188 21,146 28,303 30,698 37,138 1,192,929 1,128,426 1,077,904 1,026,321 1,172,745 2,682,172 2,437,482 2,232,705 2,041,213 2,092,138
FINANCIAL INDICATORS Earnings per share (sen) Gross dividend per share (sen) # Net assets per share (RM) Return on equity (%) Price earnings ratio Share price as at the financial year end (RM) 60.6 55.7 47.0 38.0 34.4 24.0 19.0 16.0 12.0 12.0 4.19 3.67 3.21 2.80 2.51 14.49 15.17 14.67 13.57 13.67 23.30 13.00 12.96 13.04 12.22 14.12 7.24 6.09 4.96 4.20
Notes:
* #
Comparative figure as at 31 December 2011 has been adjusted upon adoption of MFRSs. Gross dividend per share is the total dividend declared for the respective financial years.
2012
Jan High (RM) Low (RM) Volume (000) 7.49 7.21 4,555 Feb 8.84 7.45 4,897 Mar 10.00 8.70 1,617 Apr 10.00 9.20 4,682 May 10.20 9.19 2,650 Jun 9.80 8.50 16,756 Jul 9.71 8.88 3,563 Aug 10.50 9.70 2,257 Sep 11.10 10.00 11,285 Oct 13.18 11.00 3,793 Nov 12.54 11.50 5,073 Dec 14.12 11.78 5,483
REVEnUE
RM million
3,500 3,000 2,500 2,000 1,500 1,000 500 0 Financial Year Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 2,487.6 2,894.5 2,984.6 3,255.7
2,747.8
200 180 160 140 120 100 80 60 40 20 0 Financial Year Dec 08 Dec 09 Dec 10 120.6 133.5 165.3
212.8 195.4
Dec 11
Dec 12
4 December 2012
AEON Seri Manjung Shopping Centre, the Companys 21st shopping centre and also its 26th general merchandise store, opened its business to the residents of Seri Manjung and surrounding communities on 4 December 2012. The grand opening ceremony on 8 December 2012 was ofciated by Y.A.B Dato Seri DiRaja Dr. Zambry bin Abdul Kadir, Menteri Besar of Perak Darul Ridzuan. The shopping centre which the Company leased, has two (2) levels of shopping floors with approximate 453,561 square feet in net lettable area and 2,500 parking bays. Besides AEON general merchandise store and supermarket, there are more than 130 other retail shops providing, among others, varieties of food, fashion, family amusement and lifestyle products.
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Before
After
TASTE OF MALAYSIA
The AEON Taste of Malaysia (TOM) fair was held from 31 August till 2 September 2012 for the second time in Japan in collaboration with MDTCC and AEON Group of Japan. The programme was ofciated by Y.Bhg Dato Saripuddin Bin Kassim, Secretary General of MDTCC and the event was held at five (5) AeON Stores, namely AEON Lake Town Mall, AEON Urawa Misuno, AEON Makuhari, AEON Tsudanuma and AEON Shinagawa. The TOM which was initiated since 2003 by MDTCC, is to assist Malaysians local small medium entrepreneurs (SME) to have a greater shelf presence in the super market and hyper market industry outside of Malaysia besides giving them the opportunities and exposure to innovate new ways of expanding their business overseas. Through AEON Group of Japans network, SME entrepreneurs with the support of MDTCC will be able to have a platform to showcase Malaysian food products to Japan. A total of 74 items comprising local food products, Malaysian craft and souvenirs were promoted during the fair.
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OUR MISSION
To be continuously involved in fund-raising activities and events for the benefit of all Malaysians, irrespective of race, religion and creed, with special focus on the needs of Malaysian children. To provide financial aid to those with greatest needs, especially in the area of education, living environment and medical assistance. We also aim to provide activity-based resources to guide people from todays social ills. To give the children of Malaysia the opportunity to discover their self-worth and develop themselves to their fullest potential so that they may live fuller and more meaningful lives in the future.
CHARITY DRIVES
Throughout 2012, MAF has worked together with Sangla Foods Sdn. Bhd., Mamee Double-Decker Berhad and Nestle (Malaysia) Berhad to offer selected food, goodies bags and health care to customers and communities, in which a fraction of the sales made were channeled into MAF. One of the major annual fund raising activity by the Foundation is the Charity Gala Dinner. For 2012, it was hosted at KL Convention Centre on 12 July with the theme A Blend of Culture. Gracing the event was Yang Amat Berbahagia Puan Sri Noorainee binti Abdul Rahman, wife of Yang Amat Berhormat Timbalan Perdana Menteri. The net proceeds from the sales of tickets were channeled to MAF.
Before
After
Before
After
15
FESTIVITIES CELEBRATIONS
Festive seasons are a time to reflect, a time to give and a special time to be close to our families and friends. Bringing cheers to the needy especially during months of festivities, is also one of the missions of the Foundation. During the Chinese New Year festival, RM12,000 worth of daily necessities, angpows and lokam were donated to an orphanage home in Johor Bahru and an elderly home in Ampang. In August 2012, MAF celebrated Hari Raya by bringing 140 underprivileged children from various homes in Johor Bahru for a shopping trip at AEON Terbrau City Store to choose their baju raya worth RM200 each, followed by a Buka Puasa dinner at Mutiara Hotel, Johor Bahru, together with hamper gifts and duit raya. In conjunction with Deepavali Celebration 2012, 130 children from various homes and 20 families with single mothers were brought to AEON Bukit Raja Store to choose their own Deepavali items worth RM200 each and further given purple packets and hampers to bring them more joy on Deepavali occasion.
A STARRY SMILE
During the Christmas Charity Drive, orphans from 35 orphanages homes, were invited to write their wishes on Star Cards. AEON customers were then invited to full the Star Card wishes which were later presented to the children on Christmas eve. All Star Card wishes were fullled by AEON customers together with MAF and hampers were also presented to the orphanages. A total of 1,135 starry cards were received and fullled to the orphans.
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CHAIRMANS STATEMENT
FINANCIAL REVIEW The Company achieved a new revenue record of RM3.256 billion for the Year which is 9.1% higher than the RM2.985 billion for the previous financial year. Correspondingly, AEON registered a strong profit before tax of RM299.5 million and profit after tax of RM212.8 million representing 8.0% and 8.9% growth respectively over the previous years performance. The Years results were most commendable if we take into consideration that the results for the preceding year had included both the RM12.7 million gain on disposal of its amusement business and the RM11.3 million net proceeds from insurance claim though they were offset by an impairment loss of RM14.1 million in one of the Companys store and shopping centres property, plant and equipment. AEONs financial position as at 31 December 2012 remains healthy without any borrowings and with shareholders funds totaling RM1.469 billion which provides a net asset value per share of RM4.19 (2011 : RM3.67). Earnings per share also improved to 60.6 sen per share (2011 : 55.7 sen).
REVIEW OF PERFORMANCE In 2012, despite the weak global economy, Malaysia continued to perform well and recorded a GDP growth of 5.6% for the year, driven mainly by the strong domestic demand. The strong domestic demand spurred AEON to register strong results in its businesses of retailing and property management services. For the Year, retail sales contributed RM2.823 billion and the property management services contributed RM433.1 million, which respectively represented growth of 8.2% and 15.3% against their previous years results. On its retail operations, the overall better performance was mainly contributed by new stores which opened during the year and AEON Bandar Utama store and AEON Rawang store which operated for a full fiscal year in 2012. Existing stores also performed well to register a commendable same stores growth of 1.6%. The Company opened the AEON Ipoh Station 18 store and AEON Seri Manjung store in March and December 2012 respectively to bring new lifestyles and shopping experience to the community in Ipoh, Seri Manjung and its surrounding areas. AEONs property management services revenue at RM433.1 million represented an impressive growth of 15.3% over the previous years performance. The performance for the Year included same shopping centres income growth of 3.6% reflecting the higher occupancy rates, net lettable area and rental rates achieved during the Year. The Companys property management services revenue also included the results from its new shopping centres which we are confident will contribute greatly to the Companys results in years to come.
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CHAIRMANS STATEMENT
CORPORATE SOCIAL RESPONSIBILITY AEON continues to remain focus on its basic principles of pursuing peace, respecting humanity and contributing to local communities, centred on customers. In pursuance of these principles, during the Year, AEON continued with its corporate social responsibilities activities which included, among others, tree plantings for its new AEON Ipoh Station 18 Shopping Centre and AEON Seri Manjung Shopping Centre, reforestation of mangrove swamps, beach cleaning projects, Orang Utan and firefly rehabilitation projects and various Gotong Royong projects with the surrounding communities in which it operates. AEON continued to promote actively on the efficiency use of resources through its recycling programmes, reduction in use of plastic bags, use of reusable bags and other similar activities and campaigns to further educate and create strong awareness among the customers and communities. To further instill young children with a love for nature and environment, during the year under review, the Company also through its AEON Malaysia Cheers Club, which it set up in the year, organise nature trips and holiday camps for its young members.
PROSPECTS AND OUTLOOK The Malaysian economy, anchored by the continued resilience of domestic demand, is expected to remain strong. Domestic consumption is expected to remain the key driver of growth in 2013, supported by the Governments ongoing economic transformation programmes, stable employment environment and continuous investment by the private sector. Retail industry in Malaysia remains very competitive as more entrepreneurs are aware of the healthy prospects and the rising demand for better shopping experiences. AEON remains positive on its prospects and will continue to leverage on its competitive strengths and grow its business, both organically and through new store expansions. The Company will continue to provide refreshing shopping experience to its customers through refurbishment of some of its existing stores and shopping centres, and enhance the standards of customer service which it is known for across the country. AEON remains committed to its long-term plan to open new stores in strategic locations. The Company is on schedule to open a three-level community shopping centre in Kulai, Johor Darul Takzim by end of 2013. This is part of conscious and on-going efforts by the Company to maintain and enhance its dominant position in Malaysia.
DIVIDEND The Board of Directors is pleased to recommend for your approval a first and final dividend of 23% less 25% income tax and a special tax exempt dividend of 1% for the year ended 31 December 2012 at the forthcoming Annual General Meeting.
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CHAIRMANS STATEMENT
ACKNOWLEDGEMENT We are saddened by the death of our colleague, the late Datuk Zawawi bin Mahmuddin who passed away on 12 November 2012. We wish to extend our heartfelt condolences to his family. We will miss his invaluable contributions. Brig Jen (B) Dato Mohamed Idris bin Saman retired effective 28 February 2013. The Companys senior independent director, Dato Chew Kong Seng and Datuk Ramli bin Ibrahim are both retiring at this forthcoming Annual General Meeting and have indicated they are not seeking re-election. We would like to record our appreciation and gratitude for their enormous contributions to the success of the Company. I would also like to welcome our recently appointed directors Datuk Syed Ahmad Helmy bin Syed Ahmad and Dato Tunku Putra Badlishah Ibni Tunku Annuar who with their expertise and wealth of experience will be able to provide guidance and leadership which will add further strength to the Board. On behalf of the Board, I wish to thank the management and staff for their loyalty, dedication and unfailing commitments in taking AEON through another year of excellent performance. Finally, I also would like to express my gratitude to our valued customers, business associates, bankers, government authorities, our valued shareholders and my fellow directors for their continuous support and confidence in AEON.
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DIRECTORS PROFILE
DATO ABDULLAH BIN MOHD YUSOF
Independent Non-Executive Chairman Malaysian 74
Dato Abdullah bin Mohd Yusof was appointed as the Non-Independent NonExecutive Chairman of AEON CO. (M) BHD. on 26 October 1984 and redesignated as Independent Non-Executive Chairman on 26 May 2011. Dato Abdullah bin Mohd Yusof holds a Bachelor of Law (Honours) from University of Singapore, which he obtained in 1968. Dato Abdullah bin Mohd Yusof has more than forty (40) years of experience as an Advocate & Solicitor. Dato Abdullah bin Mohd Yusof started his career with Skrine & Co., as a Legal Assistant in 1968 before starting his own partnership under the name of Tunku Zuhri Manan & Abdullah, Advocates & Solicitors in 1969 and subsequently renamed the law firm to Abdullah & Zainuddin, Advocates and Solicitors. Dato Abdullah bin Mohd Yusof sits on the Board of Directors of MMC Corporation Berhad, Zelan Berhad, Tradewinds Corporation Berhad and AEON Credit Service (M) Berhad, all of which are companies listed on Bursa Malaysia Securities Berhad. Dato Abdullah bin Mohd Yusof also sits on the Board of Directors of THR Hotel (Selangor) Bhd and several private limited companies. Dato Abdullah bin Mohd Yusof is a member of the Nomination Committee and Remuneration Committee of the Board. Dato Abdullah bin Mohd Yusof has attended all the four (4) Board Meetings held in the financial year. Dato Abdullah bin Mohd Yusof holds 526,000 ordinary shares directly and 1,067,800 ordinary shares indirectly in the Company.
MR NAGAHISA OYAMA
Japanese 58 Non-Independent Non-Executive Vice Chairman
Mr Nagahisa Oyama was appointed as the Managing Director of AEON CO. (M) BHD. on 22 June 2005 and redesignated as Non-Independent Non-Executive Vice Chairman on 26 May 2011. Mr Nagahisa Oyama was appointed as Chairman of the Nomination Committee and Remuneration Committee of the Board on 26 May 2011. Mr Nagahisa Oyama is now Vice President, CEO, ASEAN Business of AEON Co., Ltd. Mr Nagahisa Oyama holds a Bachelors Degree in Business Management from Kinki University, Japan, which he obtained in 1977. Mr Nagahisa Oyama joined AEON Co., Ltd. in 1977 as a Management Trainee and was promoted to be Softline Merchandiser in 1980. Mr Nagahisa Oyama was seconded to Siam JUSCO, Thailand to set up the GMS Merchandising Division. Following his appointment at Siam JUSCO, Thailand from 1989 to 1991, Mr Nagahisa Oyama was promoted to General Manager of Tonami Regional Shopping Centre in 1991. Mr Nagahisa Oyama was next appointed as the General Manager of Kaga Regional Shopping Centre in 1996 and next transferred to Kochi Regional Shopping Centre in 2000. In 2002, Mr Nagahisa Oyama served as General Manager of Higashi Mikawa and Shizuoka Prefecture, Japan, where Mr Nagahisa Oyama was in charge of the overall planning, opening and operations of three (3) new Regional Shopping Centres and the operations of seven (7) existing Regional Shopping Centres in the Shizuoka Prefecture. Mr Nagahisa Oyama was appointed as the Managing Director of AEON Big (M) Sdn Bhd on 31 October 2012. Mr Nagahisa Oyama has attended all the four (4) Board Meetings held in the financial year. He holds 20,000 ordinary shares directly in the Company.
Note: Save as disclosed in this annual report, all the Directors mentioned in pages 20 to 24 have no conflict of interest with AEON CO. (M) BHD. or any family relationship with any Director and / or major shareholder nor have they are convictions for offences within the past 10 years, except for traffic summons, if any.
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DIRectoRs PRoFiLE
MS NUR QAMARINA CHEW BINTI ABDULLAH
Managing Director Malaysian 52
Mr Poh Ying Loo was appointed as the Executive Director of AEON CO. (M) BHD.
on 26 May 2011. Mr Poh Ying Loo is a Fellow member of the Chartered Institute of Management Accountants and a member of Malaysian Institute of Accountants. Mr Poh Ying Loo was the Audit Semi-Senior of Ong Boon Bah & Co from 1986 to 1988 and joined Dreamland Holdings Berhad as an Accounts Executive in February 1988. Mr Poh Ying Loo joined CPC/AJI (M) Sdn Bhd as Assistant Accountant and was the Senior Accountant in June 1996. Mr Poh Ying Loo joined AEON CO. (M) BHD. on July 1996 as the Finance Manager and then promoted as the Financial Controller in 2002. Mr Poh Ying Loo was the Senior General Manager in charge of Business Support in January 2008 and the Senior General Manager in charge of Corporate Finance and Investor Relations in February 2010. Mr Poh Ying Loo is currently in charge of the Corporate Finance, Investor Relations, Administration, IT & SCM Division. Mr Poh Ying Loo has attended all the four (4) Board Meetings held in the nancial year and holds 20,000 ordinary shares directly and 24,000 ordinary shares indirectly in the Company.
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DIRectoRs PRoFiLE
DATO CHEW KONG SENG
Malaysian 75 Independent Non-Executive Director
Dato Chew Kong Seng was appointed as the Independent Non-Executive Director of AeON CO. (M) BHD. on 23 July 2001. Dato Chew Kong Seng is a Fellow of Institute of Chartered Accountants in England and Wales, a Member of the Malaysian Institute of Accountants and the Malaysian Institute of Certied Public Accountants. Dato Chew Kong Seng was a tax officer in the Inland Revenue Department in the United Kingdom and then joined Stoy Hayward & Co. in the United Kingdom from 1964 to 1970. Dato Chew Kong Seng returned to Malaysia and joined Turquand Young & Co. (now known as ernst & Young) and was subsequently transferred to Sarawak office as Manager in-charge and later as Partner in-charge. Dato Chew Kong Seng was appointed as the Managing Partner of ernst & Young from 1990 to 1996. Currently, Dato Chew Kong Seng is a Director and Audit Committee Chairman of PBA Holdings Berhad and Bank of America Malaysia Berhad, as well as a Director and a member of the Audit Committee of GuocoLand (Malaysia) Berhad and Encorp Berhad. Dato Chew Kong Seng is also a Director of GW Plastic Holdings Berhad and a private limited company. Dato Chew Kong Seng is the Chairman of the Audit and Risk Management Committee and a member of the Nomination Committee of the Board. Dato Chew Kong Seng has attended all the four (4) Board Meetings held in the financial year. Dato Chew Kong Seng does not hold any shares in the Company. Dato Chew Kong Seng has opted not to seek for re-election as Director and will be retiring upon the conclusion of the Twenty-Eighth Annual General meeting on 22 May 2013.
Datuk Ramli bin Ibrahim was appointed as the Non-Executive Director of AEON CO. (M) BHD. on 20 August 1996 and redesignated as Independent Non-Executive Director on 26 May 2011. Datuk Ramli bin Ibrahim is a Member of the Malaysian Institute of Accountants and a Fellow of the Australian Institute of Chartered Accountants. Datuk Ramli bin Ibrahim was attached to KPMG Peat Marwick (now known as KPMG) in Australia, United Kingdom and Malaysia from 1959 to 1995. Datuk Ramli bin Ibrahim was appointed as a Partner of KPMG Malaysia in 1971. In 1989, Datuk Ramli bin Ibrahim was made the first bumiputera Senior Partner of KPMG Malaysia. Datuk Ramli bin Ibrahim also served on the Boards of KPMG International and KPMG Asia Pacific from 1990 to 1995. Datuk Ramli bin Ibrahim retired from KPMG Malaysia in 1995. From December 1995 to December 2000, Datuk Ramli bin Ibrahim served as the Executive Chairman of Kuala Lumpur Options & Financial Futures exchange Berhad. Currently, Datuk Ramli bin Ibrahim sits on the Board of Directors of BCT Technology Berhad and AEON Credit Service (M) Berhad. Datuk Ramli bin Ibrahim also sits on the Board of Directors of several other unlisted public and private limited companies including Measat Global Berhad, HSBC Bank Malaysia Berhad and Yayasan Tuanku Syed Sirajuddin. Datuk Ramli bin Ibrahim is also a member of the Audit and Risk Management Committee and Remuneration Committee of the Board. Datuk Ramli bin Ibrahim has attended all the four (4) Board Meetings held in the nancial year. He holds 560,000 ordinary shares indirectly in the Company. Datuk Ramli bin Ibrahim has opted not to seek for re-election as Director and will be retiring upon the conclusion of the Twenty-Eighth Annual General meeting on 22 May 2013.
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DIRectoRs PRoFiLE
MR NAOKI HAYASHI
Japanese 65 Non-Independent Non-Executive Director
Mr Naoki Hayashi was appointed as the Non-Executive Director of AEON CO. (M) BHD. on 13 August 2009. Mr Naoki Hayashi holds a Bachelor Degree in Economics from Keio University, Japan. Mr Naoki Hayashi joined AeON Co., Ltd. in March 1970 and promoted to General Manager, Executive Secretary Ofce in March 1987. In September 1990, Mr Naoki Hayashi assumed the post of General Manager, General Affair Division and subsequently transferred to be the General Manager in charge of Kanto Regional Operations. Mr Naoki Hayashi was promoted as Director of AEON Co., Ltd. in May 1996 and then in February 1997 as Director for Kanto Regional Company. Mr Naoki Hayashi was promoted as Executive Vice President in May 1998 and subsequently in May 2004 as Senior Executive Vice President and then as Executive Vice President in charge of SC Development Business and Chairman of AEON Co., Ltd.s subsidiary Diamond City Co., Ltd. in May 2006. In May 2007, Mr Naoki Hayashi was assigned as Director of AEON Mall Co., Ltd. and in May 2008 as Director and Executive Vice President for the Ofce of the President, AEON Co., Ltd.. Mr Naoki Hayashi is now a Director, Vice President, Ofce of the President, Chief Environmental Affairs Ofce of AEON Co., Ltd.. Mr Naoki Hayashi has attended all the four (4) Board Meetings held in the nancial year and does not hold any shares in the Company.
MR MITSURU NAKATA
Non-Independent Non-Executive Director Japanese 52
Mr Mitsuru Nakata was appointed as the Executive Director of AEON CO. (M) BHD.
on 26 May 2011 and redesignated as Non-Independent Non-Executive Director on 28 February 2013. Mr Mitsuru Nakata holds a Bachelor Degree in Business Management of Ritsumeikan University. Mr Mitsuru Nakata joined AEON Co. Ltd. in March 1985 as a Section Leader of Ikoma store in Nara prefecture and then Group Leader of Yamato Kohriyama store in April 1986. In April 1987, Mr Mitsuru Nakata was the Division Leader of Kongou store in Osaka prefecture and in April 1991, as the Store Manager of Takami store. Mr Mitsuru Nakata was the Food Line Manager of Katabiranotuji store in Kyoto prefecture in April 1993 and the Store Manager of Nagayoshi store in April 1996. In April 1998, Mr Mitsuru Nakata was the Store Manager of Fujiidera store in Osaka Prefecture and then in April 2001, the Store Manager of Shinnabari store in Mie Prefecture. Mr Mitsuru Nakata was the Store Manager of Hamamatsu Shitoro in Shizuoka prefecture in September 2003. Mr Mitsuru Nakata was seconded to AEON CO. (M) BHD. in October 2006 and was the General Manager in charge of Merchandising Division. Mr Mitsuru Nakata was the Senior Executive General Manager, GMS Business Division in 2009. Mr Mitsuru Nakata was appointed as the Executive Director of AEON Big (M) Sdn Bhd on 31 October 2012. Mr Mitsuru Nakata has attended all the four (4) Board Meetings held in the nancial year and holds 7,000 ordinary shares directly in the Company.
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DIRectoRs PRoFiLE
DATUK SYED AHMAD HELMY BIN SYED AHMAD
Independent Non-Executive Director Malaysian 66
Datuk Syed Ahmad Helmy bin Syed Ahmad was appointed as the Independent Non-Executive Director of AEON CO. (M) BHD. on 16 April 2013. Datuk Syed Ahmad Helmy bin Syed Ahmad holds a Bachelor of Laws (LL.B) Honours from University of Singapore, which he obtained in 1971. Datuk Syed Ahmad Helmy bin Syed Ahmad has forty (40) years of experience as legal practitioner and judicial ofcer in Malaysia and Singapore. Datuk Syed Ahmad Helmy bin Syed Ahmad started his legal career in 1972 before starting his own partnership under the name of Yahya Helmy & Co in 1985 and subsequently renamed the law firm to S.A. Helmy & Partners. Datuk Syed Ahmad Helmy bin Syed Ahmad was then appointed as High Court Judge for High Court of Malaya Johor Bahru, High Court Judge for High Court of Malaya Shah Alam and Court of Appeal Judge for Court of Appeal, Putrajaya in year 2000, 2007 and 2009 respectively. Datuk Syed Ahmad Helmy bin Syed Ahmad retired as a Judge in December 2012 and appointed as the Chairman of Advocates & Solicitors Disciplinary Board. Datuk Syed Ahmad Helmy bin Syed Ahmad does not hold any shares in the Company.
Dato Tunku Putra Badlishah Ibni Tunku Annuar was appointed as the
Independent Non-Executive Director of AEON CO. (M) BHD. on 16 April 2013. Dato Tunku Putra Badlishah Ibni Tunku Annuar holds a Bachelor of Science (Hons) in Business Administration. Dato Tunku Putra Badlishah Ibni Tunku Annuar started his career as Account Manager in J.Walter Thompson Advertising in 1987 and subsequently joined DMIB Berhad as Senior Executive and thereafter promoted as Marketing Manager. From January 1992 to December 1995, Dato Tunku Putra Badlishah Ibni Tunku Annuar worked in Sandestin Resort, Florida, United States of America as Manager of Marketing and Development. Dato Tunku Putra Badlishah Ibni Tunku Annuar joined Kumpulan Sime Darby Berhad Group (KSDB) in January 1996 and has held various senior positions within the KSDB, amongst them act as Senior Manager in Sales & Marketing of Sime Darby Land Sdn. Bhd. (January 1996 to July 2000), General Manager Sales & Marketing of Auto Bavaria (August 2000 to March 2004), Managing Director of Auto Bavaria (February 2004 to March 2005), Director of Operations of Sime UEP Properties Berhad (April 2005 to December 2005) and Director-Group Property of Sime Darby Berhad Group Property (January 2006 October 2007). Dato Tunku Putra Badlishah Ibni Tunku Annuar was appointed as the executive Vice President in Property Development & Strategic Investments, Property Division of Sime Darby Property Berhad from November 2007 to July 2008 and as Managing Director and Member of the Board of Sime Darby Healthcare Sdn Bhd and Sime Darby Property Berhad from August 2008 to July 2011, prior to venturing into his current business practices. Currently, Dato Tunku Putra Badlishah Ibni Tunku Annuar is the Managing Director of Putra Ventures Sdn Bhd. Dato Tunku Putra Badlishah Ibni Tunku Annuar was appointed as a member of Audit and Risk Management Committee of the Company on 16 April 2013 and he does not hold any shares in the Company.
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Senior Management
Ms Yukiyo Komatsu
Senior General Manager of GMS Operations
Mr Yoshihiro Kurokawa
MaxValu Project Leader
Mr Kenji Hiramatsu
General Manager of Information Technology & Supply Chain Management
Mr Kenichi Suenami
Senior General Manager of Shopping Centre Business
Mr Yoshihiro Kaya
General Manager of Shopping Centre Development, Property Management and Construction
Mr Kazuhiro Kakura
General Manager of Electrical Business
Mr Hiroyoshi Ekinaga
General Manager of New Business Development
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REVIEW OF OPERATIONS
AEONs reassuring strong creditable performances in both of its core businesses of retailing and property management services in financial year 2012 indicated resiliency amidst the challenges in the external environment, having benefited from the rising domestic demand and new stores openings. The Company achieved total revenue of RM3.256 billion for the year under review which represented a growth of 9.1% over its previous years performance. Retailing business contributed RM2.823 billion and property management services contributed RM433.1 million.
RETAILING OPERATIONS The retail industry in the year under review remains very competitive, more so with the challenging and uncertain global economic environment. Retailers were getting creative and resourceful in developing ingenious ways to sustain their business and market share. New malls with new formats and themes also added more variety of choices for shoppers through their innovative shopping concepts, aggressive merchandise strategies that create differentiation and prevalent pricing promotions as they strive to attract shoppers traffic to their stores and seek to retain customers loyalty. Under such challenging environment, AEONs retailing business continued to remain resilient and generally delivered good results. AEON continued to rely on its established brand and competitive strengths to provide the best in value, quality and variety of merchandise and services to its customers. On 8 March 2012, the Company had successfully launched a rebranding exercise to replace the old trading name JUSCO with AEON, in line with the AEON Group of Japans globalisation direction and to further allow the Company to create a clear brand identity for its business in Malaysia. Together with its rebranding exercise, the Company had introduced a new tagline, AEON Enriching Your Lifestyle to give all AEONs customers an enriching experience every time they shop with AEON. To show its appreciation to the customers for their continuous support, a series of promotions and activities including special merchandise and pricing were carried out. The Company also took the opportunity to embark on its customer service programme (STEP) to further enhance and revamp its customer service to complete the total customer experience, thus continuously positioning the Company as a leading retailer and lifestyle destinations for all its customers. The retail sales of RM2.823 billion represented a 8.2% growth over the previous years performance. The better performance was as a result of a combination of performances from new stores that were opened during the year, full year contributions from stores that were opened in year 2011 as well as the overall better performance from existing stores. Same stores registered a growth of 1.6% for the year under review. AEON stores of Permas Jaya, Bukit Indah and Mahkota Cheras recorded a double-digit growth ranging from 10.4% to 13.5% due to the growing number of customers and loyalty members base and benefits from the improvement in the surrounding infrastructure and housing developments. Stores in Melaka, Taman Universiti, Seremban 2, Bukit Tinggi, Seberang Prai City, AU2 and Bandaraya Melaka also enjoyed good performances of 5.2% to 8.2% growth against their previous years results. Other stores of Taman Maluri, Wangsa Maju, Tebrau City, Cheras Selatan, Taman Equine and Queensbay recorded lower growth ranging from 0.02% to 2.4% against their previous years performances. For JUSCO Ipoh store, the lower performance of 11.1% against previous year was within expectation with the opening of AEON Ipoh Station 18 store in March 2012 besides stiff competitions nearby. AEON stores of Bandar Baru Klang, Mid Valley, Bandar Puchong, Metro Prima and Bandar Sunway recorded lower performance of between 0.3% and 4.8% due to the competitive environments.
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REVIEW OF OPERATIONS
AEON stores of Bandar Utama and Rawang which operated for a full year in 2012 further contributed to the revenue growth as their customers base grew whereas the new AEON Seri Manjung store which opened in December 2012 contributed marginally. The MaxValu supermarkets, whose contributions are still marginal for the year under review, registered a total contribution of RM40.3 million for the year. The Company had also ventured into new retail business categories of doughnut (Mister Donut), pharmacy (AEON Wellness) and lifestyle household products (DAISO) shops which in total contributed a revenue of RM38.1 million.
PROPERTY MANAGEMENT SERVICES The property management services business remains a significant and integral part of the AEONs overall business. In managing the shopping centres and its tenant mix, AEON was able to provide shoppers with a one-stop conducive and convenient shopping destinations that also complements its own AEON stores retailing business within the shopping centres. AEON continued to employ successful and sustainable strategies to attract and increase shoppers traffic to its shopping centres. This was through a provision of the right tenant mix, exciting promotional activities and joint promotional efforts with tenants together with proper maintenance and superior customer services in terms of facilities and convenience. Attractive and modern kiosks that offer varieties of merchandise and services were also introduced to attract more shoppers. Close relationship with tenants were maintained through regular dialogues and feedbacks which allowed development of synergistic strategies to increase shoppers traffic. During the year under review, AEONs property management services registered revenue of RM433.1 million representing a healthy growth of 15.3% over the previous years performance amidst an environment of increased competition. The strong growth for the year under review was both due to the same shopping centre income growth of 3.6% and also contribution from new shopping centres of 11.5% to the shopping centre income. Overall occupancy rate remains at 93.5% as at the end of 2012. With the opening of AEON Ipoh Station 18 Shopping Centre and AEON Seri Manjung Shopping Centre on 29 March 2012 and 4 December 2012 respectively, AEON now manages twenty one (21) shopping centres.
PROSPECTS AND OUTLOOK Despite uncertainties in global economy and given the challenging external environment, domestic demand is expected to remain one of the key drivers of economic growth in 2013. Retailing sector will benefit from this and the sustainable private sector spending on the back of stable income and healthy labour market conditions.
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REVIEW OF OPERATIONS
Retailing In the highly competitive retail industry, AEON recognises that for long-term business sustainability, it needs to continuously evaluate and enhance its strategies and competitive strengths. AEON aims for its business to be sustainable through achievement and sustainability of customer services, merchandise assortment and a store shopping experience that exceed the customers expectations. The Company recognises that urban shoppers, in particular, could now enjoy wider choices of retail stores to patronise and also wider variety of merchandise to choose from. They are now seeking for total shopping experience instead of just basic shopping needs. As such, in 2013, besides focus to strengthen its business and operations units, merchandising, human resource development, information technology upgrade, customer service and operational efficiency of selling floors, the Company will also be focusing on renovation and upgrading of its existing stores. The Company will embark on refurbishment on some of its existing stores such as Bandar Baru Klang, Bandar Puchong, Ipoh Kinta City and Wangsa Maju so as to continue offering refreshing shopping experience to its customers. For merchandising whereby the constant challenge is to develop suitable merchandise and mix that meet the demands and tastes of consumers who are today well informed and spoilt for choice, AEON remains committed to its pursuit of continuously sourcing for the right and new merchandise to offer to its customers. This includes leveraging on AEON Group of Japans expertise in various merchandise categories, its own private brand development efforts and developing big concept merchandise categories that comprise better brands composition mix and latest trends. For AEON Member Loyalty Card which remains a strategic marketing tool for the Company, AEON, through innovative membership recruitment scheme and further enhancement of members benefits through alliance with more business partners, remains focus on sustaining and at the same time growing this huge loyalty customer base as it opens up new stores. On its general merchandise stores expansion, the Company is scheduled to open a new General Merchandise Store in Kulai, Johor Darul Takzim by end of 2013. In addition to previous announcements, the Company had also recently announced its intention to develop a new store in Shah Alam, Selangor in the near future. Plans are in the pipeline to further fuel growth with identified locations for new stores openings in which announcements will be made in due course. Property Management Services While the number of shopping centres in the country have been increasing as the income and prosperity level increase, the landscape is expected to change further in the near future with the entry of new property management services players and announcement of construction of new malls that are expected to be completed in the next few years. The presence of more malls will mean there will be keener competition for shoppers and tenants. While AEON has the advantage of its General Merchandise Store being its own anchor tenant, thus enabling it to secure good shoppers traffic and tenant mix, it remains committed to its philosophy of Customer First which demands that its malls remain well-maintained with good facilities for customer convenience, possess good tenant mix and always have attractive shopping events and activities. The ultimate objective is to provide the overall shopping experience that exceed shoppers expectation. On its expansion plans, AEON, which had grown steadily over the years and make its presence in key strategic locations and markets nationwide, remains committed to its mid-term strategy plan to solidify its position as the market leader and make AEON accessible to more Malaysians. On 4 December 2012, the Company opened AEON Seri Manjung Shopping Centre, its 21st shopping centre in Malaysia, bringing convenience and neighborhood shopping experience to the communities in Seri Manjung and Setiawan in Perak. The Company is also scheduled to own and operate a three-level community shopping centre with an approximate net lettable area of 457,000 square feet in Kulai, Johor Darul Takzim towards the end of 2013. During the year under review, it had also announced on its commitments for expansion in the strategic area of Shah Alam, Selangor. The Company will continue to identify new suitable locations for shopping centre development and will announed their openings in due course.
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Steps will be taken to make available the salient features of the Board Charter on the Companys website at www.aeonretail.com.my. The Board delegates the implementation of its strategy to the Companys Management. However, the Board remains ultimately responsible for corporate governance and the affairs of the Company. While at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging its responsibilities, the Board has established the following Board Committees to perform certain of its functions and to provide it with recommendations and advice: Nomination Committee; Remuneration Committee; and Audit and Risk Management Committee.
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Nomination Committee Major Responsibilities Board size and composition Selection & recruitment of directors Board performance evaluation
Remuneration Committee Major Responsibilities Remuneration policy Directors fees Performance related pay schemes
Audit and Risk Management Committee Major Responsibilities Internal audit External audit Risk management Financial reporting Audit reports Related party transaction
Each Committee operates in accordance with the written terms of reference approved by the Board. The Board reviews the terms of reference of the committees from time to time. The Board appoints the members and the Chairman of each committee. AEON Code of Conduct (AEON COC) The AEON COC which was established by AEON Co., Ltd. in Japan has been adopted by the Board to support the Companys objectives, vision and values. The basic principles have been carried out by having appropriate regard to the interests of the Companys customers, shareholders, people, business partners and the broader community in which the Company operates. All employees are briefed and provided with a copy of the AEON COC on the commencement of their employment. All the employees will attend a refresher seminar on the AEON COC annually. The principles of AEON COC are being constantly made aware to employees through citation in staff assemblies and before the start of the Companys meetings. The AEON COC can be found on the Companys website at www.aeonretail.com.my. The Board recognises the importance on adherence to the AEON COC by all personnel in the Company and has put in place a process to ensure its compliance. The Company further encourages its employees to provide feedback with any concerns regarding illegal or unethical conduct, or malpractice via its existing Code of Conduct Hotline (Whistle-Blowing Hotline). Sustainability Policy The Company has established a Sustainability Policy which is based on the three basic principles of AEON, which is to honor Peace, People and Community. With the aim to promote sustainable development, the Company focuses on key areas of environment conservation and social contribution. The Company is also actively engaging with the Companys customers, staff members, suppliers, tenants, stakeholders, Non-Governmental Organisations (NGOs) and local authorities in activities related to sustaining the environment. The Companys activities on environment, social and governance for the year under review are disclosed on pages 8 to 16 of this Annual Report.
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